Hammerson provides €128m backing to new European outlet venture

Hammerson is investing £100 mln (€128 mln) to a new joint venture that will own retail outlet centres in Europe.

The UK REIT is partnering on the VIA Outlets venture with German outlet specialist Value Retail, Dutch pension fund asset manager APG and European retail property fund manager Meyer Bergman.

Hammerson is the only UK listed REIT to have strategic exposure to the outlet shopping centre sector, which has seen increasing demand from investors due to its consistent delivery of double-digit organic growth, the company said. 'The outlet village proposition is supported by the increase in global tourism, with Chinese visits to Europe set to grow 72% by 2018, alongside the expansion of luxury retail brands generating increased merchandise.'

EUROPEAN OUTLET CENTRES
Hammerson has committed £70 mln towards the new venture and acquisitions are expected to complete before the end of 2014. Hammerson has a 47% economic interest in VIA Outlets and the company's investment in the venture is expected to generate an IRR in excess of 10%.

The REIT has also agreed to provide £30 mln to Value Retail to assist with new extensions at Bicester Village and Kildare Village and for the new Value Retail village in Shanghai, which is due to open in 2015.

Hammerson plans a £400 mln share placing to help fund its commitment to the outlet venture, as well as the acquisition of the 40% it did not own in Highcross shopping centre in the UK city of Leicester and for its development pipeline.

VIA Outlets will focus on outlets with large catchments close to major European cities with a strong tourist appeal. VIA Outlets has already acquired two assets in 2014: Batavia Stad, Amsterdam and Fashion Arena, Prague.

FIRST ASSETS
Batavia Stad was the first outlet centre in the Netherlands. The 26,340 m2 scheme is home to over 100 stores, cafes and restaurants and well known brands including G-Star, Michael Kors, Hugo Boss and Polo Ralph Lauren.

Fashion Arena, Prague is the largest outlet centre in the Czech Republic, and the only one in Prague, the 25,125 m2 centre comprises over 100 brand outlet stores including Diesel, GANT, Tommy Hilfiger and Nike. VIA Outlets has also identified a series of future acquisition opportunities.

Hammerson chief executive, David Atkins said: 'The investments we have announced today underline our commitment to winning retail sectors which will deliver continued growth and outperformance.

'We believe that 100% ownership of Highcross will enable us to increase the centre's attractiveness to both retailers and consumers and to drive future sales performance. VIA Outlets provides us with an attractive opportunity to increase the Company's exposure to the fast-growing European outlet shopping market and leverage Value Retail's extensive European platform and its relationships with luxury and premium retail brands.'